Commerce IG Plans "Holistic' Oversight of NTIA Broadband Spend in House Testimony

Commerce's Office of Inspector General is “building three audit teams and a team on investigators to focus on broadband” and has “planned a holistic oversight program to monitor the grant process throughout its lifecycle,” Gustafson said in her written testimony. The oversight plan “is based on an evaluation of NTIA’s preparedness to administer and manage increased grant rewards,” she says. The OIG “initiated an audit of NTIA’s process for awarding grants for the Tribal Broadband Connectivity Program, which is currently the most mature of IIJA programs and has already distributed $1.7 billion.”

OIG has begun using the $25 million it got from Congress to do mandated oversight of the 2022 Chips and Science Act, Gustafson says. The law allocated Commerce up to $39 billion in direct funding, $11 billion for research and development and up to $75 billion in direct loans and loan guarantees to bolster U.S. semiconductor manufacturing. OIG is now “hiring staff for two audit teams to conduct CHIPS program oversight, as well as a team of investigators to focus on the detection and resolution of any fraud committed” by funding recipients, she says: “We expect the audit staff will include at least one subject matter expert in semiconductor materials and technology.”

Commerce “must implement adequate internal controls and oversight” of the Chips program, Gustafson says. “The increased funding may also increase the volume and complexity of financial transactions, thus making it more difficult to detect and prevent payment errors, fraud, waste, and abuse. The increase in funding may require additional monitoring and reporting to ensure project recipients comply with statutes, achieve intended outcomes, and use funds efficiently. Finally, the increased funding may introduce new or emerging risks that must be identified and addressed in a timely fashion.”

Gustafson cites Commerce’s experience with the FirstNet Authority as an example of “the risks associated with deferring too much to an outside authority.” OIG found last year that FirstNet couldn't demonstrate it was making the most appropriate or efficient use of its federal funding and that AT&T had too much control over its decisions (see 2302150034). That experience demonstrates the risks Commerce faces “when it is necessary to rely heavily on a contractor to implement new programs,” she says: OIG used “the lessons learned … to inform” its oversight of IIJA and chips funding disbursals, in particular that Commerce “must maintain continuous, stringent oversight and independence to ensure the objectives of the program are achieved and that contracts bring maximum value” for the department and taxpayers.

The Reforming Broadband Connectivity Act "will ensure we have the resources in place to continue expanding access to broadband while relieving the burden of fees on consumers, especially our seniors," Klobuchar said. The legislation would direct the FCC to initiate a rulemaking to revise the USF contributions system that factors in the fairness and the relative burden any changes in fees will have on consumers and businesses, and the impact the proposed changes to the contribution system will have on seniors. Senate Communications Chairman Ben Ray Lujan, D-N.M., and Senate Armed Services Committee ranking member Roger Wicker, R-Miss., similarly seek a USF contributions revamp in their refiled Funding Affordable Internet with Reliable Contributions Act (see 2303160080). USTelecom hailed the measure. Klobuchar's office also cited support from the Minnesota Telecom Alliance, NTCA and WTA.